Apple settles HTC patent suits in shift from Jobs’ war plan

Bigger Threat

Settling with HTC may allow the world’s most-valuable company to focus its legal efforts on Samsung, the Suwon, South Korea-based maker of Galaxy handsets that’s now the world’s largest smartphone maker.

“Samsung is still going hard and has become an even bigger threat” since being sued by Apple, said Lee Seung Woo, a Seoul- based analyst at IBK Securities Co. Apple may have decided it achieved what it wanted by going after HTC because the Taiwanese company’s share of the smartphone market has weakened, Lee said.

James Chung, a Seoul-based spokesman for Samsung, declined to comment.

Jobs, who died of cancer last year at 56, summed up his approach in a March 2010 statement accusing HTC of stealing designs by Cupertino, California-based Apple.

“We can sit by and watch competitors steal our patented inventions, or we can do something about it. We’ve decided to do something about it,” Jobs said at the time. “We think competition is healthy, but competitors should create their own original technology, not steal ours.”

Google, Samsung

At the time, HTC was the leading maker of smartphones using Android. Since then, its market share has fallen behind Samsung’s. Now, Apple’s biggest smartphone patent fight is against the South Korean company, and court-ordered negotiations haven’t produced a deal.

Samsung is appealing the $1 billion verdict awarded by a California jury in August, and it has won legal cases against Apple elsewhere in the world.

Cook also held talks earlier this year with Google Chief Executive Officer Larry Page regarding patent disputes involving the two companies, a person familiar with the talks said in August. Google completed the $12.5 billion purchase of Motorola Mobility in May in its biggest takeover.

Jobs told his biographer, Walter Isaacson: “I am going to destroy Android. I’m willing to go to thermonuclear war on this.”

Apple Complaint

An Apple complaint to the U.S International Trade Commission in Washington sought to block imports of HTC smartphones because the devices allegedly copied the iPhone’s pinch-to-zoom feature. HTC fought back, alleging infringement of patents it bought last year for ways to reliably transmit a larger amount of data.

“This is definitely a positive surprise for HTC,” said Daniel Chang, who rates the stock underperform at Macquarie Group Ltd. in Taipei. “The shares will probably get a bump on this news, though it doesn’t solve the structural problems at the company.”

HTC’s stock decline this year follows a 42 percent drop last year amid falling sales and lower profit. The company’s share of the global smartphone market fell to 5.8 percent in the second quarter from a peak of 10.7 percent a year earlier, according to Bloomberg Industries data.

“HTC is pleased to have resolved its dispute with Apple, so HTC can focus on innovation instead of litigation,” Chief Executive Officer Peter Chou said in the statement.

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